Personal Money Management

Written by Sarah Provost

Personal money management is one of the most important life skills a person can have, yet many parents and schools don't pay the topic much attention. You can start teaching your children personal money management skills from a very young age. Those who learn how to manage their resources early in life are much less likely to run into trouble later. Here are a few ways you can help your children learn how to manage their money.

Even very young children can understand the concept of limited resources and making choices. My husband came from a large family, and every Sunday, each child was given "treat money." They could spend it on whatever they liked, and most of them spent it on candy. One youngster, though, never bought treats. Instead, he hoarded his money, and took satisfaction in watching it mount up. Unfortunately, that's all he did with it, and the others mocked him for a miser. Another seldom bought treats, but used the money he saved to buy toys he really wanted. Soon the rest began to save at least a portion of their treat money toward a larger purpose, even those as young as four.

Personal Money Management for Older Children

My preteen son and I used to have epic battles every year when it was time to buy school clothes. He always needed new sneakers, and he always wanted expensive ones--very expensive ones. Finally, I gave him a set amount of money and told him he could buy his own school clothes. The first time, he bought the sneakers he wanted and had nothing left for other clothes. I had to deal with my own feelings when he went to school in old, ill-fitting clothes, but the next time, he compromised on the sneakers and put together a reasonable wardrobe.

Unfortunately, many of us have to learn personal money management as adults. Sometimes this happens only after a person has fallen very deeply into debt. It's not to late, as adults, to train ourselves to be responsible with our money. Just as each of my husband's siblings developed their own system for saving and spending money, so you will, too. It cannot be stressed enough that creating a functioning and self-maintaining budget (using software and online services really offer an advantage in the ease-of-maintenance category) is the first step toward learning money management.